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Here's the Worst Credit Card Advice We Found on Instagram

The Motley Fool logo The Motley Fool 11/14/2022 David Chang
A woman dialing a number on her phone and sitting at a table with her laptop. © Getty Images A woman dialing a number on her phone and sitting at a table with her laptop.

We all know that we should be careful about who we take financial advice from. But in the age of social media, it's easy to forget that not everyone on the internet is an expert. In fact, some of the people giving out advice on Instagram are downright dangerous. Here are some of the worst pieces of credit card advice we found on Instagram.

Balance transfer and repeat

There is nothing wrong with taking advantage of a 0% interest rate, especially if your current interest rate is high. One Instagram user recommends you continue to transfer your credit card debt to a 0% APR balance transfer promotion and repeat the process. 

The problem becomes if you think you can do this endlessly. If not done properly, the costs can outweigh the benefits. If you struggle to pay your debt on-time, have bad credit, and can't pay off your debt quickly, then all you will do is kick the can down the road. Unless your credit score is near the top, the 0% APR will only be for several months, and chances are the card's interest rate will increase even more than you were paying before. 

Why do credit card companies offer this? They hope that you will transfer your debt to them, they charge a fee (typically a percentage of the balance transfer), and hope that you will spend even more on the new card. If credit cards tempt you to spend more, then balance transfer will not be a good idea.

We promise to improve your credit score

When scrolling through Instagram posts on credit cards, I couldn't help but notice how many credit repair and debt relief service companies promised to raise your credit score and negotiate with creditors to reduce your debt. The credit repair industry unfortunately is fraught with scams. They target consumers with significant credit card debt and demand money upfront, ranging anywhere from $100 to $300. 

What they generally do, you can do yourself. If there are false negative items on your credit report, you can contact the credit bureaus directly to have them review it. If your credit issues go much further than that, go to a credit counseling agency. They are different from credit repair services and are typically free to use. These organizations will review your finances, debt and credit reports, and work with you to help you manage your debt and finances. Avoid any company that promises to do things that are too good to be true, and do research before working with any credit repair organization.

Use these credit cards

Another common type of Instagram posts are users recommending certain credit cards over others. All of this advice needs to be taken with a grain of salt. Some offer decent advice, while others are clearly steering you to their credit card's affiliate link. This is how they make money. When you click on the link and get the card, then they get a commission on the sale. 

Some credit card companies pay a higher commission amount, so it pays for users to push and recommend certain cards over others. Before you start clicking on a bunch of links and opening credit cards, be sure to compare credit cards to find one right for you. Also, keep in mind that every time you open up a credit card it hurts your credit score.

When it comes to financial advice, it's important to be selective about who you listen to -- especially on social media. Remember, just because someone has a big following doesn't mean they know what they're talking about when it comes to money matters. So before you take any advice about credit cards from Instagram influencers, make sure you do some research to see if it holds up. And if something sounds too good to be true? It probably is.

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